TVA Going in the Wrong Direction

Tennesseans want more solar power and choices other than TVA

Most Tennesseans want more of their electricity from the sun and are willing to change a fundamental tenet of the Tennessee Valley Authority in order to do so.

Most Tennesseans want more of their electricity from the sun and are willing to change a fundamental tenet of the Tennessee Valley Authority in order to do so.

A new statewide survey of 600 Tennessee voters found 81 percent of respondents want Tennessee to increase its use of solar power and 88 percent said they would use more solar energy in their home if it was available at the same or lower price.

The poll by North Star Opinion Research also found that by better than a 7-to-1 margin, Tennesseans want to be able to buy power from other sources than Tennessee Valley Authority, even though the TVA now prohibits such third party power sales in its 7-state region. The poll found 83 percent of Tennesseans think municipalities or power cooperatives in the Tennessee Valley should be able to buy power from generation sources other than TVA to get cheaper or more renewable power.

“The level of agreement is quite remarkable,” said Dan Judy of North Star Opinion Research, which conducted the statewide survey in late October. “We don’t see these type of numbers very often and this really indicates a deep well of support for consumer choice and for solar power.”

The survey was commissioned by a coalition of differing groups interested in promoting more solar power generation and opposed to TVA proposals to allow its distributors to impose higher fixed costs next year on energy use.

Stephen Smith, executive director for the Southern Alliance for Clean Energy, said TVA is failing to keep pace with its neighbors in buying privately produced solar power. Smith said TVA’s requirements that the 155 municipal power utilities and power co-ops in the Tennessee Valley buy all their power from TVA limits their ability to shop around for their power or to purchase solar power from commercial generators other than TVA.

“With actions like increasing mandatory fixed charges, limiting contracts with solar companies, and not paying fair rates for solar generation, TVA is undermining the solar power market, all in a desperate attempt to maintain control of power generation and limit customer choice,” Smith said at a news conference Monday. “Public power has always prided itself on its ability to be different from some of the investor-owned utilities in its ability to work with customers and give them what they want. Yet, this is 180 degrees in the opposite direction; it is heavy handed, monopolistic behavior.”

Smith said TVA “has been hijacked and they are moving in a direction that is not customer friendly.”

Debbie Dooley, a tea party co-founder and president of Conservatives for Energy Freedom, said TVA is the biggest federal government monopoly in the country and is undermining local control of power by its contractual requirements that local power companies buy only from TVA.

“It is time for the monopoly power company TVA to get out of the way and stop moving towards barriers in the solar market,” Dooley said.

At the other end of the political spectrum, Elder Jimmie Garland of the Tennessee State Conference of the NAACP complained that TVA’s move to raise base or fixed costs fees for electricity is a regressive move that “will especially hurt families on low and fixed income.”

Under the TVA act, the federal utility requires local power companies that purchase TVA- generated power to buy all of their power from TVA.

Next year, the utility is planning to restructure its rates in a way TVA officials said better reflects its true costs of service.

Bill Johnson, president of TVA, said in a changing energy market, TVA needs to periodically adjust how it prices its power, although the changes next year are not designed to raise more revenue and he expects overall electricity prices in the near term to rise less than inflation.

Although the new rate structure is still being developed and has yet to be approved by the TVA board, TVA is expected to raise the base, or fixed cost portion of the monthly power bill, while lowering slightly the variable portion of each bill. As energy demand flattens or declines, the cost of maintaining transmission and generation capacity for service to each home remains the same even though the amount of power sold each month may decline.

“We do not have a monopoly,” Johnson said last month. “We have contracts with our local power companies and those have limited terms.”

Johnson said TVA is the sole power supplier in its seven-state territory to avoid costly duplication of transmission lines and service arrangements in the Valley.

“You do not want to have duplication of lines, duplication of services and duplication of assets, which in the long run just raises the price for everyone,” Johnson said. “We have full requirements contracts and the reason is that we built this system to service these customers.”

TVA paid a premium for solar power to help solar producers in the past, although those premiums have been phased out.

Last year, TVA also provided $2 million in grants to EPB in Chattanooga and Appalachian Electric Cooperative in New Market, Tenn., for distributor-owned community solar projects. TVA also is purchasing power from large scale solar projects in Millington, Tenn. and near Huntsville, Ala., and is installing its own 1 megawatt solar project at the Allen power plant in Memphis.

But while solar generation increases in the Tennessee Valley, TVA has eliminated its premium pay for solar generation to other generators and capped the amount of commercial solar power it will buy each year.

TVA has yet to set its 2018 pricing schedule for solar purchases, but solar backers worry that the direction of the federal utility will limit its purchases of additional privately-generated solar power and even drive some customers off the grid entirely.

“Given recent statements made and policy changes issued by TVA, it has never been more evident than today where TVA stands in its lack of support for privately held renewable power projects and the companies that build them here in Tennessee,” said Brian Bickel, president of the Tennessee Solar Energy Industries Association. “As solar has grown around the world and the U.S. in general, TVA has spent the past five years working to curtail the value of solar and restrict both system sizes allowed on their grid as well as the types of entities who would seek to develop their own solar projects.”

The survey released Monday showed most Tennesseans want TVA to pay rates to buy solar- generated power comparable to what it charges its customers.

“The value for solar sent back to the grid should be fair, and equal to the rate at which it is purchased,” Bickel said. “Any sort of downward pressure, or even uncertainty around that rate, is a bad policy move by TVA that effectively de-values solar.”